Instructions: a) Compute the following ratios (by showing the formulas) for 2019: Current ratio, Quick (Acid-test) ratio, Debt to Assets ratio. b) Comment on the current ratio of 2019 (computed above) for Kagoj company in the following situations: (i) XYZ company is a competitor of Kagoj company. The current ratio of XYZ company for the year 2019 is 2.39:1. (ii) The industry average of current ratio for the year 2019 is 2.50:1.

b) The Balance Sheets of Kagoj Company are presented below: KAGOJ COMPANY December 31 Particulars 2019 (Tk.) 2018 (Tk.) Assets Cash 1,75, 100 164,200 Short-term investments 59,000 70,000 Accounts receivable (net) 1.86,800 162,800 Inventory 63,300 50,400 Prepaid Advertisements 70,000 80,000 Equipment 4,20,000 4,08,000 Furniture 2,11,000 1,65,000 Total assets 11,85,200 11,00,400 1,00,000 59,500 64,500 1,25,300 62,000 1,00,700 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable Salaries payable Notes payable Total current liabilities Long term Liabilities Common stock (Tk. 10 par) Retained earnings 2,24,000 2,88,000 2,80,000 4,20,000 2,61,200 3,40,000 2,50,000 2,22,400 Total liabilities and stockholders' equity 11,85,200 11,00,400